After all these years, rear-end car accidents still produce new law. Here, the court of appeals held that evidence of Medicaid benefits were properly excluded by the collateral source rule. Under CRS 10-1-135, any collateral source payment is excluded from evidence. Medicaid payments are a collateral source, and the statute abrogated the common law “gratuitous government benefits exception.” Plaintiffs’ claims against ANS, the company insuring the car, were dismissed; thus, ANS as the prevailing party was entitled to costs but not fees because the claims were not frivolous. The remaining issues got short shrift: 1) the sudden emergency doctrine has been abolished; 2) a party who requests a hearing on costs is entitled to one; 3) Plaintiffs were awarded appellate fees because Defendants frivolously argued for a new trial under CRCP 59 based on a requirement that did not exist.
Tag Archives: Collateral Source Rule
James C. Smith and Dona Laurita, v. Alan W. Kinningham and Accelerated Network Solutions, Inc., 2013COA,103 (July 3, 2013)
Scene 1: “I just got rear-ended – I’m OK, just shaken.” Scene 2, days later: “My neck and back really hurt.” So starts a familiar drama in this personal injury case. The defense in this damages-only trial was how much of the medical bills the defendant should pay. The trial court instructed the jury to reduce damages if they found plaintiff had continued expensive treatment though it did not resolve her pain. The court of appeals reversed, finding zero support for the proposition that a plaintiff has an affirmative duty to end treatment if it is expensive and ineffective. Another instruction on the reasonableness and necessity of treatment, which was also given, sufficiently addressed the issue. Addressing evidentiary issues, the court cited Cosgrove for the collateral source rule, and approved admission of evidence of delayed recovery syndrome and previous domestic violence.
The “eggshell skull” is a memorable torts doctrine from law school. Less memorable is the apportionment of damages for aggravation of a pre-existing condition. Both address how to award damages to an injury-prone person. The former provides that a tortfeasor takes a person as they are, including pre-existing conditions, and pays for all damages caused. The latter provides that a tortfeasor does not pay for damages it did not actually cause, even if the person is already injured because of a pre-existing condition. The distinction is fine, but, as the court of appeals found, the difference is a tortfeasor pays for everything if a plaintiff has an asymptomatic pre-existing condition, but partial damages if he/she has a symptomatic pre-existing condition. The court also determined that disability benefits are not a collateral source and not subtracted from total damages.
How much should an injured plaintiff get paid because of an injury caused by a tortfeasor? In this case, a tort plaintiff is injured, sues, and a jury found the defendant liable for damages. The jury also awarded $50,000 in economic damages. Plaintiff’s healthcare provider billed about $250,000 for treatment; the health insurance company only paid $40,000, a fact presented to the jury. Collateral sources of payment, such as payments by health insurance, do not reduce a plaintiff’s damages, because to do so would reward a tortfeasor with someone else’s money; this is the collateral source rule. The Rule excludes pre-verdict evidence of collateral payments and also offsets the collateral payments post-verdict. Here, the Court ruled that under the common-law collateral source rule, the jury should not have heard evidence of the $40,000 payment.
As the healthcare debate rages, a central question is over the actual cost of medical care. Courts also try to determine the reasonable value of medical services provided to an accident victim. That value is either justice for victims or double recovery, depending on your perspective. The collateral source rule, now a statute rather than a common-law doctrine, attempts to balance those competing interests by restricting the evidence considered before a damage award, and then subtracting actual payments after the award. But what evidence should be considered before the award? The amounts billed or the amounts actually paid, or both? A divided Court answered by looking to the collateral source statute, and held the Legislature answered by picking the amount billed, but not actually paid. In this case, the relatively new statute applied prospectively, but pre-verdict.